Undisclosed Use Of Bots In Allegedly Skill-based Game Leads To $420 Million Damages Award For False Advertising And Unfair Competition

A New York federal jury has delivered a blockbuster verdict against Papaya Gaming Ltd., awarding $420 million in damages to competitor Skillz Platform Inc. in a closely watched false advertising and unfair competition case involving skill-based games. The decision, alongside a potential disgorgement award that could reach hundreds of millions more, could reshape the legal landscape for real-money “skill-based” mobile games. At the core of the dispute was a deceptively simple question: are these games truly based on player skill, or are unseen mechanisms—like bots—tilting the odds?

The Claims and Verdict

Skillz alleged that Papaya misrepresented its popular apps, including Solitaire Cash and Bubble Cash, as fair, skill-based competitions. According to Skillz, Papaya instead used bots and “tailored sessions” to control outcomes—ensuring that players would lose after winning too much or occasionally win to stay engaged. The jury agreed. It found Papaya liable under both the Lanham Act and New York General Business Law for false advertising and deceptive trade practices. The $420 million award reflects compensatory damages. Separately, disgorgement of Papaya’s profits—an equitable remedy to be determined by Judge Denise Cote—has been estimated in proceedings to range from $652 million to $720 million, and may prove the more consequential figure.

Why This Case Matters

This verdict goes beyond a dispute between competitors—it raises serious questions about transparency and integrity across the broader skill-based gaming industry.

Companies in this space often rely on a key marketing promise: that outcomes depend primarily on user skill rather than chance. That distinction is not just branding—it has regulatory implications, separating lawful skill-based contests from gambling in many jurisdictions. If a platform secretly uses bots or manipulates outcomes, that promise collapses. The jury’s findings suggest that undisclosed gameplay manipulation can constitute not only consumer deception but also actionable competitive harm.

It is also one of the largest Lanham Act verdicts in recent memory, which alone will draw attention from litigants and courts alike.

The Role of Bots and “Tailored Sessions”

Evidence presented at trial included internal communications indicating that Papaya deployed bots and engineered gameplay sessions with predetermined outcomes. These “tailored sessions” allegedly served dual purposes:

• Limiting payouts by causing successful players to lose.
• Retaining weaker players by allowing intermittent wins.

In effect, Skillz argued—and the jury accepted—that Papaya was not merely hosting games but actively shaping results.

Key Takeaways

This case sends a strong warning to developers, advertisers, and platform partners:

• Transparency around gameplay mechanics is critical.
• Marketing claims about “skill” must be substantiated.
• Undisclosed use of bots can trigger significant legal exposure.

Industry Implications

If the verdict survives post-trial motions and any appeal, it may prompt:

• Increased scrutiny from app stores, payment processors and ad platforms regarding skill-based claims.
• Greater regulatory attention to hybrid gaming models that blur the line between skill and chance.
• A wave of litigation testing similar practices across the industry.
• New entrants in the field ensuring the integrity of their platforms and the candor and transparency in their marketing as is done by current leaders in the skill-gaming space.

Looking Ahead

This verdict is a reminder that in the digital gaming space, what happens beneath the surface of a product matters as much as how it is marketed. Companies that invest in genuine transparency in their mechanics, marketing, and compliance frameworks will be better positioned not only to avoid litigation, but to build the kind of durable trust with players and regulators that no bot can manufacture.

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